Pangang Group does not intend to reduce steel production

Friday, 09 July 2010 17:16:40 (GMT+2)

Chinese steelmaker Pangang Group Company Ltd, which is based in the city of Panzhihua in the country's southwestern province of Sichuan, does not plan to reduce its steel production even though finished steel prices have continued to decrease, according to Lu Weijia, the director of Pangang Group's production center.

Mr. Lu stated that the company has started repair and maintenance work in July which has lately caused a drop in Pangang Group's steel output, but that this does not mean Pangang is actively seeking to reduce its production. The Pangang Group official said that the company will pay close attention to steel price changes, and will adopt various measures to ensure smoothness in production, logistics and sales, in order not to avoid a buildup of steel product inventory.

Steel market insiders in Chengdu, capital of Sichuan Province, say that the main cause for production cutbacks by Chinese steelmakers is high inventory. In addition, weakened demand from downstream industries such as the automotive and home appliance sectors also dampens enthusiasm for production.

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